Residential sales in eight cities second highest in a decade in H1 2023
The luxury homes segment rises by 5% year on year, affordable segment shrinks in Mumbai amid price rise; flex spaces share grows to record 26% in office transactions
MUMBAI: The residential sales in the top eight cities touched 1.56 lakh units in the first half of 2023, the second highest in a decade, said the half yearly report on real estate released by international property consultants Knight Frank on Tuesday.
The luxury segment homes priced above ₹1 crore grew from 25% in H1 2022 to 30% in H1 of 2023, followed by the mid-segment homes priced between ₹50-lakh- ₹1 crore which rose from 35% to 38%, but the sales of affordable homes priced below ₹50 lakh continued to plummet, shrinking 21 per cent year on year. The midsegment grew by 9% year on year, while the luxury segment saw a growth of 17% year on year.
The report said the demand for office space increased by 3% year on year in H1 of 2023, and office space transactions logged 14.8 mn sq ft in second quarter of 2023, the highest quarterly figure since Q1 of 2021. The volume transacted by flex spaces touched a record high of 6.8 mn sq ft, and its share of 26% the highest ever.
Mumbai residential sales declined by 8 per cent from 44,200 units in H1 of 2022 to 40,798 units, but new launches saw a 6% growth year on year. Knight Frank India senior executive director Gulam Zia attributed the decline in overall sales numbers in Mumbai to the sharper decline in affordable segment sales.
Mumbai, which accounted for 26% of the sales, also had the highest unsold inventory of 169,577 units, a growth of 7% year on year, and would take the longest period -- 8.4 quarters to sell (QTS) - the entire inventory.
The report also pointed out that all eight cities witnessed a price rise in the range of 2 to 10%, with Hyderabad seeing a 10% rise year on year, while Mumbai experiencing a 6% growth year on year. The report also pointed out that mid segment sales in Bengaluru accounted for 50% of all sales, while the premium segment of above ₹1 crore witnessed a 65% growth in NCR.
Amit Goyal, Managing Director, India Sotheby’s International Realty said the residential market in India has been experiencing sustained growth since 2020. “In the calendar year 2022, housing sales also reached an all-time high. We see this very minor moderation in the June 2023 quarter, as a brief pause, mostly due to a decline in ready to move in quality inventory in good locations of top seven cities of India,” he said.
“Barring that, we expect home sales to maintain their growth momentum, with projections pointing to another strong year. End-users’ demand for residential properties has strengthened, and we are also witnessing a gradual return of investors, particularly in the high-end and luxury residential segments. This renewed interest is also fuelled by price appreciation after a prolonged period of stagnant home prices in India,” he added.
Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd said the Indian residential market is on a growth path and the is at the beginning of a long-term upcycle. “In 2022 calendar year, housing sales not only surpassed pre-COVID level but touched an all-time high. The trend will continue and we are set to witness another record year. End-users demand has strengthened, while investors are gradually returning to the market after seeing price appreciation after a decade of stagnation,” he said.
Vinay Rohira, Sales Head, SD Corp said, “Despite headwinds such as rising interest rates and prices, the Mumbai residential market, which is driven by strong consumer demand, remains strong. Sales momentum is expected to improve, thanks to factors such as projected income growth and a strong desire for homeownership. The Mid and premium segment homebuyers, who have both the desire and financial capability to purchase a home, are the primary drivers of market momentum.”